I was going to call this post Textual Intercourse, but I vaguely remembered using that title before, and sure enough, there it is, back in September of last year. Although it's a challenge, I try to have unique post titles. While glancing at my post from half a year ago, these paragraphs got my attention:
Hubris, obnoxiousness, and a sense of infallibility have seeped into the brains (such as they are) of the bulls. Depression, fear, defeatism, paranoia, and crushed confidence have swept across the bears (those of us who have survived this far, at least). And I say what I've said before – those uttering that they are "neither bull nor bear, but simply trade what they see" need to have Joe Wilson spring up and shout "You Lie!" to their face. Because such a trite truism is just as insipid and impractical as the quote that there are two rules to trading: "(1) Don't lose money (2) Don't ever forget rule (1)."
The bottom line is this – – it took guts, vision, and perspective to go long and stay long the market in March. Those who did – and stuck with it (I am not among them) have had tremendous success. It would have been all too easy to ridicule those folks back in March. No one is laughing now. The shoe is on the other foot now. The question is: how long will it remain there?
Well, half-a-year-younger Tim, we know the answer. "At least another six months!" Because, in spite of a few moments of weakness, the market has continued to do nothing but sail forward, with the past few weeks being a virtually uninterrupted orgy of bidding up prices.
Anyway, I'm sitting here at the Starbucks in bucolic Los Altos, California – – – the very same Starbucks I was at last Saturday when I wrote my Come-To-Jesus post. Last weekend was – – to use the 60s vernucular – – a really, really heavy mental trip for me. It compelled me to call into question all my assumptions. It was, as a trader, a check-up from the neck up. And I started doing some things different.
For one thing, I was a lot more willing to take on long positions in stocks (ahem – Tim – would have been nice a year ago, but there you have it). If memory serves, I am long 28 positions right now, and just about all of them are in the green – – a few of them, handsomely so, even though the positions are just a few days old.
If you take a look at my Long Ideas, which have been much more frequent lately, you'll find a lot of gems in there (so far, at least). The style of my charting hasn't changed, but my openness to taking on long positions is vastly improved, and it has made this week infinitely more bearable than last week. My portfolio feels a lot more balanced, and although the bearish-to-bullish mix is still about 3-to-1, it certainly beats 4-to-0. The long positions have been good enough to really take some of the sting out.
So what about the bearish positions? You know, I looked at every single one of them late today, and I still think they are good-looking charts. The fact is that the Russell 2000 has gone up – – what is it – – 20 out of the past 24 sessions? Something like that. So this has made managing a portfolio of anything but pure-bullishness to be challenging.
In my 20+ years trading stocks, there has been no more constructive, educational, and mind-broadening experience than the past few months with Slopers. Doing this blog forces me to think through what I'm doing far more deeply than if I was just off on my own.
I also am amused – and even a little confused – at Slope's prosperity during these dark days for bears. Traffic is as strong as it's ever been, and a couple of web sites whose sole purpose seemed to have been to hurl tomatoes at this blog have slunk into non-existence. I think it's a testament to the quality of the community that Slope is thriving. Because, look, I'm not fooling myself – – I know this is a bearish blog, and it has a reputation as such. But the fact that we're still able to learn, share ideas, and – – from time to time – – make money – – is illustrative of our staying power as a group.
Just imagine what this zoo would be like if the market were actually falling!
So, being devoid of charts right now, I have nothing to say about the market. Next week is pretty huge, being both options expiration week and FOMC week, and the wind is blowing very fully into the sails of the bulls. But I am far more at peace with the market now, in spite of its strength, thanks to embracing a variety of long positions that I sincerely think are well-formed and technically defensible (for instance, as much as I love Apple's products, it's not the kind of stock I'm buying these days, persistent strength notwithstanding).
Tim has definitely entered the ramble zone, but know this – – we'll have our day in the sun again. It might be tomorrow, it might be next month, or it might not be for two years. Nobody knows. In the meantime, let's try to make the best of it. We are, as a group, our most valuable shared asset.